The kinked-demand curve of an oligopolist is based on the assumption that

A) competitors will follow a price cut but ignore a price increase.
B) competitors will match both price cuts and price increases.
C) competitors will ignore a price cut but follow a price increase.
D) there is no product differentiation.

Kinked-demand Curve

A demand curve that has a distinct bend or kink, typically illustrating that a firm in an oligopoly will experience a different elasticity of demand for price increases compared to price decreases.

Price Cut

A reduction in the price of a good or service to attract more customers or boost sales.

Price Increase

A rise in the cost of goods or services, often measured by inflation rates or observed in market prices.